Public Storage to Acquire National Storage in $10.5B Deal
All-stock transaction represents 31% premium, accelerates consolidation in self-storage REIT sector
Public Storage has agreed to acquire smaller rival National Storage Affiliates in an all-stock transaction valued at $10.5 billion, the largest consolidation deal in the self-storage real estate investment trust sector.
Under the terms of the agreement announced Monday, National Storage shareholders will receive 0.14 shares of Public Storage for each share they own, representing a value of $41.68 per share based on Public Storage's closing price on March 13. The offer represents a 31% premium to National Storage's pre-announcement trading price.
National Storage shares surged 31% in morning trading to $40.51, while Public Storage declined 1.2% to $291.21, reflecting typical market dynamics where acquirer shares face dilution pressure while target shareholders capture the acquisition premium.
The transaction, unanimously approved by both companies' boards, is expected to close in the third quarter of 2026 pending approval from National Storage shareholders. Public Storage has secured $4 billion in financing from Goldman Sachs and Wells Fargo to support the deal.
The combined company will control a portfolio spanning more than 1,000 self-storage properties across 37 states and Puerto Rico, with 69 million rentable square feet and approximately 550,000 units. The pro forma enterprise value of the merged entity will reach roughly $77 billion.
This acquisition marks a significant milestone in the ongoing consolidation of the fragmented self-storage sector, where public REITs and large private operators have been aggressively acquiring smaller independent operators. The sector's resilience, low operating costs, and demand tied to life events such as relocation, downsizing, and estate clearing have continued to attract institutional capital despite broader real estate market volatility.
The deal is expected to be accretive to Public Storage's funds from operations per share within the first year of closing, according to company projections. Public Storage anticipates generating $110 million to $130 million in annual run-rate synergies within three to four years, with full realization potentially increasing earnings by $0.35 to $0.50 per share.
Analysts have responded positively to the strategic rationale. Barclays raised its price target on Public Storage to $347 from $331, maintaining an "Overweight" rating, while Scotiabank increased its target to $319 from $300 with an "Outperform" rating. Scotiabank noted that external growth through acquisitions offers "a better thematic story" for REITs in the current environment.
For National Storage, which operates as a Maryland-based REIT focused on storage properties in the top 100 metropolitan statistical areas, the deal provides an exit at a substantial premium. The company's shares had been trading below analyst consensus targets—prior to the announcement, analysts maintained a "Hold" rating with a $33 price target.
The combined entity will leverage Public Storage's "PS4.0" strategic vision, which emphasizes digital transformation and operational excellence. The company expects to enhance its omnichannel digital-first platform and apply industry-leading revenue and expense management capabilities across the expanded portfolio.
The self-storage sector has faced headwinds from elevated new supply and subdued housing turnover in recent years, but industry analysts anticipate supply growth will moderate in 2026 and beyond. This moderation, coupled with stabilizing capital markets, should improve fundamentals starting in 2027, providing a favorable backdrop for the enlarged company's growth prospects.
Public Storage, headquartered in Glendale, California, is the largest self-storage operator in the United States with a market capitalization of $52.3 billion. National Storage, based in Greenwood Village, Colorado, had a market capitalization of $4.6 billion prior to the announcement. The transaction will create a dominant player in an industry that continues to benefit from durable demand drivers despite cyclical economic pressures.